Northeastern Junior College in the red, but has healthy reserves

PERA legislation could have substantial impact on college's budget

Northeastern Junior College's budget could see a substantial negative impact next year, depending on what the state legislature decides to do with PERA. That's what Lisa LeFevre, vice president of administrative services, told the college's Advisory Council on Thursday.

"When they started telling me what the plans were, as far as funding from the state, we were getting a great increase in funding from the state of Colorado, base funding, they were going to give us the ability to increase our tuition rates by 3 percent, everything was looking wonderful, until they started having these conversations about the PERA legislation," she said.

The bill that is being considered right now is changing the base that the PERA is based on from net to gross, "which would be a huge impact for us," LeFevre said.

NJC pays 20.15 percent into the PERA and employees pay 8 percent into the fund.

What's going to happen with PERA is unknown at this point. There are some discussions about the state taking a chunk of money and dealing with this and not making the change. Plus, in the Colorado Community College System, because of the revenue outlook, there is conversation about "budget sprinkles," because the CCCS may get another $4.5 million, which would increase the allocation each college gets.

The most recent estimate shows it would cost $387,000 if the legislature changes the PERA base from net to gross, leaving the college short $267,000.

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"The good news we're a very healthy college," LeFevre said, adding that the recommendation is the college has 6 percent in its reserves and NJC's reserve rate is good. "I have been working on some of the projects out of some of the reserves that we have, but we're still going to be in a very healthy position.

NJC President Jay Lee added on to that, reminding the council when he and LeFevre were preparing to make their budget presentation to the system last June, the college anticipated it would dip into its reserves in 2017-18 and they have done that.

"We know we'll be in the red, we're just not ready to project how much we'll be in the red, but as Lisa shared, with our reserve status and the plan, we knew we were going into the red. We feel pretty good about where we're going to end up," he said. "I am concerned about how long we can do what we did this year. As Lisa mentioned, we're already anticipating running into the red next year. The PERA thing could make that worse, it could make it better."

Lee suggested the college needs to do some long-range planning and some visionary work with the budget, looking at how it will move forward and to what extent it's going to invest in needed facility improvements and dip into reserves.

In other business, he informed the council that CCCS has identified its next president. Former Lt. Gov. Joe Garcia will take the post from Nancy McCalin, who is retiring, in July. NJC plans to make arrangements to have him on campus for a visit as soon as possible after he starts.

Lee also shared that as NJC looks at enrollment and trying to attract more students, it will be critical to add some new programs. The college is in the process of identifying those new programs with the help of Great Associates, which helps colleges identify programs that should be operating in their area.

One of the first programs identified was training for electricity related jobs. But, Lee said they will also continue to look at programs like medical assistant and a mechanic-related program in correlation with the wind technology program that would train people on the infrastructure of a building, heating, cooling, refrigeration, electricity, etc.

John Chapdelaine asked about the status of a hemp program. Lee said it's on hold, in part because there's some move on the federal level to remove hemp from the controlled substance one category, which would remove restrictions. But, they have also determined it would not be a full-fledged program; at most it would be two or three classes.

Fred Jackson asked if NJC is considering offering a four-year nursing degree now that the legislature has approved allowing community colleges to do that. Lee said NJC is not looking at that right now and was not one of the seven CCCS schools that stated they wanted to offer it when the bill was being considered. He explained NJC is waiting to see what the requirements for the director of that program would have to be; they suspect it will require a doctorate degree, which NJC's nursing director does not have. Plus, Fort Morgan has planned to start offering it and they want to see how it goes for them.

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